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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Alabama

FOR IMMEDIATE RELEASE
Friday, February 20, 2015

Huntsville Pharmaceutical Distribution Facility Agrees to Pay $300,000 Penalty

HUNTSVILLE -- A Huntsville pharmaceutical distribution facility has agreed to pay the federal government $300,000 to settle allegations that it failed to maintain complete and accurate records and inventories of controlled substances, including opioid painkillers, announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Special Agent in Charge Clay A. Morris.

Generics Bidco and the U.S. Attorney for the Northern District of Alabama finalized the settlement agreement this week. The settlement was reached without any filings in U.S. District Court. With the payment of the penalty, the government agrees to release Generics from all civil liability for violations of records keeping under the Controlled Substances Act.

"The $300,000 penalty in this matter represents the largest penalty collected in Alabama in a DEA compliance investigation," Vance said. "It is imperative that pharmaceutical companies, and all facilities registered with DEA to handle controlled substances, keep clear and current records on receipt and distribution of those narcotics so that they can be tracked and not at risk of being diverted for illegal use in our communities," she said. "I applaud the DEA for its diligent work to ensure all facilities registered with the agency comply with the strict record-keeping and control mechanisms of the Controlled Substances Act."

DEA conducted an accountability audit of Generics for Dec. 12, 2012, through July 14, 2014, and raised allegations that the business violated record-keeping provisions of the Controlled Substances Act by not keeping separate bi-annual inventories of Schedule II controlled substances and the less restricted Schedule III-V substances. DEA also charged that Generics did not keep records readily available, and that the audit showed substantial error in the accounting of the Schedule II and III drugs hydrocodone, carisoprodol, oxycodone and Meperitab.

Generics, as part of the settlement agreement, denies any intentional violation of regulations, but states it has updated several record-keeping procedures and has taken other voluntary measures to assist with compliance. The company cooperated fully in the DEA audit and follow-up proceedings.

Updated March 26, 2015